Under FERS, a full survivor annuity equals 50 percent of your Basic annuity. Image: Vinicius Tupinamba/Shutterstock.com
By: Reg JonesMany federal employees are coming up on retirement soon, as 2025’s “deferred resignation” periods are to end September 30 in most cases. Many people who accepted that offer of being on paid leave but away from the workplace since the spring are going to take it into retirement.
In some cases, agencies have allowed employees to delay retirements by several months in order to become eligible. Either way, retirement is not far ahead, and with it comes a need to understand how survivor benefits work.
If you are married when you retire – and there isn’t any court-ordered divorce settlement blocking the way – you are required by law to provide a full survivor annuity for your spouse. The only exception to that requirement is if you and your spouse agree to a lesser amount – or none – and you do that in a notarized letter of intent.
Survivor Annuity Amount
Under FERS, a full survivor annuity equals 50 percent of your Basic annuity. Under CSRS, it’s 55 percent. If you and your spouse agree to a lesser FERS survivor benefit, the only option is 25 percent. Under CSRS, it can be any percentage amount to which you and your spouse agree or it can be a specific dollar amount. If the two of you agree to a specific dollar amount, it can be as little as $1.
At retirement, the Office of Personnel Management will determine how much your annuity will have to be reduced to pay for the survivor benefit. The reduction will be made from the base annuity you are entitled to on the day you retire. That’s done before any deductions are taken out for such things as federal taxes, state taxes (if applicable), and insurance premiums.
Reduction to Pay for the Survivor Annuity
If you are a FERS retiree, your annuity will be reduced by 10 percent of the survivor annuity amount you elect. If you are a CSRS retiree, OPM will use a formula to determine the amount of your annuity. It’s 2.5 percent of the first $3,600 you elect, plus 10 percent of any amount above $3600.
Most retirees elect a full survivor annuity for their spouses. However, there may be a good reason for electing a smaller amount. For example, unless your spouse is already entitled to coverage under the Federal Employees Health Benefits program in his or her own right, it will allow your spouse to continue that coverage if you die. Note: In case your spouse’s survivor annuity isn’t large enough to cover the premiums, he or she can pay them directly to OPM.
COLAs
All survivor annuity benefits are increased by annual cost-of-living adjustments, regardless of the age of the survivor.
End of Survivor Annuity
With one exception, it only ends with the death of the survivor. Here’s the exception. If your surviving spouse remarries before age 55, the survivor benefit will stop. However, it may be restored if that marriage ends because of the annulment of the marriage, divorce, or the death of the new marriage partner.
Former head of retirement and insurance policy at the Office of Personnel Management, and longtime FEDweek contributor, Reg Jones is known throughout the federal workforce community as an authority on pay and benefits.
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